Exhibit 10.1


 


SIXTEENTH AMENDING AGREEMENT


 


THIS
AGREEMENT is made as of August 13th, 2008,


 


BETWEEN:


 


MAGNA ENTERTAINMENT CORP.


 


as
Borrower (the “Borrower”)


 


-
and -


 


THE GUARANTORS SET FORTH



ON THE SIGNATURE PAGES HEREOF


 


as Guarantors (collectively, the “Guarantors”)


 


-
and -


 


BANK OF MONTREAL, ACTING THROUGH ITS



CHICAGO LENDING OFFICE


 


as
Lender (the “Lender”)


 


-
and -


 


BANK OF MONTREAL, ACTING THROUGH ITS



CHICAGO LENDING OFFICE


 


as
Agent (the “Agent”)


 


RECITALS:


 


A.                                   The
Lender has made a certain credit facility available to the Borrower in
accordance with the terms and conditions set out in an amended and restated
credit agreement (the “Loan Agreement”) dated as of July 22, 2005, between
the Borrower, the Guarantors, the Lender, the Agent and BMO Nesbitt Burns Inc.,
a Division of Bank of Montreal, as arranger, and as amended from time to time.


 


B.                                     The
Borrower, the Lender and the Agent have agreed to further amend the Loan
Agreement by extending the Maturity Date and making certain other changes in connection
with a possible MID Reorganization (as defined below) on the terms and
conditions set out herein.


 


C.                                     The
Guarantors have agreed to confirm the guarantees and security granted by them
in connection with the Loan Agreement.


 

















 


D.                                    Article 7
of the Loan Agreement sets out certain affirmative and negative obligations
which the Borrower has covenanted to be bound by and has agreed to follow
unless the Agent, on behalf of the Lender, waives in writing.


 


NOW
THEREFORE in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged) the parties agree as
follows:


 


1.                                                                                      Interpretation


 


Capitalized terms not
defined in this Sixteenth Amending Agreement have the meaning given to such
terms in the Loan Agreement.


 


2.                                                                                      Loan
Agreement Amendments


 


The parties hereto agree to amend the Loan Agreement by:


 


a)              Adding a new definition in Section 1.1
as follows: “Bridge Loan Agreement
means  the US$110,000,000 credit
agreement  dated as of September 12,
2007 amongst the Borrower, as borrower, MID Islandi SF, as lender and certain
other parties listed therein, as such agreement has been amended on the date
hereof and as may be amended from time to time;”


 


b)             adding a new definition in Section 1.1
as follows: “MID Reorganization
means any reorganization
transaction, including, without limitation, 
a plan of arrangement, purchase, consolidation, liquidation, merger or
amalgamation, under which,  MI
Developments Inc. transfers, consolidates or liquidates any part of its
ownership interest in the Borrower which results in MI Developments Inc. being
the beneficial holder, directly or indirectly, of less than 51% of the votes
attaching to all Voting Interests of the Borrower.”


 


c)              deleting
the definition of “Termination Date”
in section 1.1.120 and replacing it with the following new definition of
Termination Date:


 


“Termination Date
means September 15th, 2008, or such earlier date as the entire
balance of the Loans under the Credit Facility may become due hereunder,
whether by acceleration or otherwise; or, in each case, such later date to
which the Credit Facility has been extended pursuant to section 2.5. For
greater certainty, the Lender and the Borrower agree that  if the maturity date under the Bridge Loan
Agreement is amended such that it occurs prior to  September 15th, 2008 for any reason
(other than an Event of Default thereunder), the Termination Date hereunder
will be deemed to be  such date that is
14 days prior to such amended maturity date under the Bridge Loan Agreement.”


 


d)             adding 
a new paragraph 2.3.4 (Repayment
under Credit Facility) as follows:


 


2

















 


“2.3.4  
The Borrower shall, within two (2) Business Days of any MID
Reorganization  prepay (by payment
to the Agent for the account of the Lenders) 100% of  the Obligations outstanding under the Credit
Facility (a “Reorganization Prepayment”).   The net cash proceeds from any  Reorganization Prepayment shall not be
applied to any L/C Loans or, at the Borrower’s option, Libor Loans, until the
Maturity Date applicable thereto and, until such application, the proceeds
allocated for such purpose shall be held by the Agent for the account of the
Lenders and invested on behalf of the Borrower in an interest-bearing
investment (or investments) as security for the repayment of future
indebtedness of the Borrower under such L/C Loan or Libor Loan, with interest
earned thereon, if any, to be paid to the Borrower on repayment of such
Loans.  The amount of such application so
made in respect of a Reorganization Prepayment shall be permanent and
irrevocable and each Lender’s Commitment shall be reduced rateably;”


 


e)              adding a new section 9.1.13 (Events of Default) as
follows:


 


“ 9.1.13  a MID Reorganization
occurs without a corresponding payment in full of 100% of the
Obligations outstanding under the Credit Facility in accordance with section 2.3.4;


 


f)                deleting the “or” immediately after section
9.1.12 and re-inserting it after the new section 9.1.13 and re-numbering the
existing section 9.1.13 as section 9.1.14.


 


3.                                                                                      Conditions
Precedent to Loan Agreement Amendments


 


The obligation of
the Lender to agree to the amendment herein, and to make available any further
advances, is subject to fulfillment of the following conditions precedent on
the date hereof:


 


(a)          the representations and
warranties of the Borrower set out in section 6.1 of the Loan Agreement are
true and correct on the date hereof provided if any such representation and
warranty is specifically given as of any particular date or particular period
of time, then such representation and warranty shall continue to be given as at
such date or such period of time;


 


(b)         no Default or Event of
Default has occurred or is continuing or would arise immediately after giving
effect to or as a result of the amendment herein;


 


(c)          no Material Adverse
Change since December 31st, 2007 shall have occurred;


 


(d)         payment in full of all
reasonable invoiced fees, including for greater certainty, an upfront fee of
US$400,000 and all reimbursable out-of-pocket expenses payable by the Borrower
on or prior to the date hereof including payment of all reasonable fees,
disbursements and out-of-pocket expenses of counsel to the Agent and the Lenders;
and


 


3

















 


(e)          such other documentation
or information as the Lender shall have reasonably requested.


 


4.                                                                                     Loan
Agreement


 


Save as expressly amended
by this Sixteenth Amending Agreement, all other terms and conditions of the
Loan Agreement and each of the Loan Documents remain in full force and effect,
unamended, and this Sixteenth Amending Agreement constitutes a Loan Document
for the purposes of the Loan Agreement.


 


5.                                                                                     Confirmation
of Guarantee and Security


 


Each of the Guarantors
acknowledges and confirms that (i) the guarantee granted by it pursuant to
Article 10 of the Loan Agreement constitutes a continuing guarantee of,
among other things, all present and future obligations of the Borrower to the
Lender under the Loan Agreement and shall remain in full force and effect;
and  (ii) each of the other Loan
Documents executed by it shall remain in full force and effect.  In addition, (i) MEC Land Holdings
(California) Inc. acknowledges and confirms that the Golden Gate Mortgage
constitutes continuing security for the obligations secured thereby and shall
remain in full force and effect, and (ii) The Santa Anita Companies, Inc.
acknowledges and confirms that the Santa Anita Mortgage constitutes continuing
security for the obligations secured thereby and shall remain in full force and
effect.


 


6.                                                                                     Counterparts


 


This Sixteenth Amending
Agreement may be signed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.


 


IN
WITNESS WHEREOF this Sixteenth Amending Agreement has been
executed by the parties hereto as of the date first written above.


 


[signature page to
follow]


 


4

















 


	
   

  	
  MAGNA
  ENTERTAINMENT CORP., as

  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES BROMBY

  
	
   

  	
   

  	
  Name: James T. Bromby

  
	
   

  	
   

  	
  Title: Senior Vice-President,
  Operations

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARY LYN SEYMOUR

  
	
   

  	
   

  	
  Name: Mary Lyn Seymour

  
	
   

  	
   

  	
  Title: Vice-President and
  Controller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PACIFIC
  RACING ASSOCIATION, as

  Guarantor, but only with respect to Article 10
  of

  the Loan Agreement and all other provisions

  related thereto

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES BROMBY

  
	
   

  	
   

  	
  Name: James T. Bromby

  
	
   

  	
   

  	
  Title: Senior Vice-President,
  Operations

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARY LYN SEYMOUR

  
	
   

  	
   

  	
  Name: Mary Lyn Seymour

  
	
   

  	
   

  	
  Title: Vice-President and
  Controller

  



 


5

















 


	
   

  	
  MEC LAND
  HOLDINGS (CALIFORNIA)

  INC., as Guarantor, but only with respect to

  Article 10 of the Loan Agreement and all other

  provisions related thereto

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES BROMBY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  James T. Bromby

  
	
   

  	
   

  	
  Title: Senior Vice-President,
  Operations

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARY LYN SEYMOUR

  
	
   

  	
   

  	
  Name: Mary Lyn Seymour

  
	
   

  	
   

  	
  Title: Vice-President and
  Controller

  



 


6

















 


	
   

  	
  THE SANTA
  ANITA COMPANIES, INC., as

  Guarantor, but only with respect to Article 10
  of

  the Loan Agreement and all other provisions

  related thereto

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES T. BROMBY

  
	
   

  	
   

  	
  Name: James T. Bromby

  
	
   

  	
   

  	
  Title: Senior Vice-President,
  Operations

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARY LYN SEYMOUR

  
	
   

  	
   

  	
  Name: Mary Lyn Seymour

  
	
   

  	
   

  	
  Title: Vice-President and
  Controller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LOS ANGELES
  TURF CLUB,

  INCORPORATED, as Guarantor, but only with

  respect to Article 10 of the Loan Agreement
  and

  all other provisions related thereto

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES T. BROMBY

  
	
   

  	
   

  	
  Name: James T. Bromby

  
	
   

  	
   

  	
  Title: Senior Vice-President,
  Operations

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARY LYN SEYMOUR

  
	
   

  	
   

  	
  Name: Mary Lyn Seymour

  
	
   

  	
   

  	
  Title: Vice-President and
  Controller

  



 


7

















 


	
   

  	
  BANK OF
  MONTREAL, acting  through
  its

  Chicago lending office, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KRISTINA H. BURDEN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  MONTREAL, acting through its

  Chicago lending office, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KRISTINA H. BURDEN

  
	
   

  	
   

  	
  Name: Kristina H.
  Burden

  
	
   

  	
   

  	
  Title: Vice-President

  



 


8